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Job protection, industrial relations and employment

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  • Giulio Piccirilli

    () (DISCE, Università Cattolica)

Abstract

In a dynamic stochastic monopoly union model we show that firing costs have a small and ambiguous impact on the level of employment if the union precommits to future wages. Further, in comparison with the commitment equilibrium and for very general union preferences, the no-commitment equilibrium exhibits higher wages and a lower employment level. Since commitment-like equilibria are more likely in cooperative bargain environments, these results suggest that, coeteris paribus, the interaction between employment protection and the quality of industrial relations reduces unemployment. We provide evidence on OECD countries which is consistent with this predictions.

Suggested Citation

  • Giulio Piccirilli, 2007. "Job protection, industrial relations and employment," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0050, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  • Handle: RePEc:ctc:serie4:ieil0050
    as

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    File URL: http://www.unicatt.it/Istituti/EconomiaImpresaLavoro/Quaderni/ieil0050.pdf
    File Function: First version, 2007
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    References listed on IDEAS

    as
    1. Modesto, Leonor & Thomas, Jonathan P., 2001. "An analysis of labour adjustment costs in unionized economies," Labour Economics, Elsevier, vol. 8(4), pages 475-501, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Firing costs; unemployment; industrial relations.;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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